Salesforce (CRM) Stock Drops Following Adobe Downgrade and Sector Weakness

TLDR

• Salesforce shares fell 6.9% to $241.62 on Tuesday amid enterprise software sector weakness
• Adobe downgrade by Oppenheimer over slow AI monetization sparked the sell-off
• Barclays cut Snowflake to “Hold” citing competition from Amazon and Oracle
• Software stocks declined broadly with Adobe down 5.6%, ServiceNow down 3.6%
• February 25 earnings report will test investor confidence in AI product demand

Salesforce stock dropped 6.9% on Tuesday afternoon, closing at $241.62. The decline made it one of the Dow’s worst performers for the session.

Salesforce, Inc., CRM

The sell-off began when Oppenheimer downgraded Adobe. The analyst raised concerns that Adobe’s AI tools weren’t generating revenue fast enough. That warning rippled through the entire enterprise software sector.

Snowflake got hit hard too. Barclays downgraded it to “Hold” because of intense pressure from Amazon and Oracle. Both companies have been aggressively bundling their AI data tools.

Broad Software Weakness

The pain spread quickly. Adobe fell 5.6% while ServiceNow dropped 3.6%. Microsoft slipped 0.9% and Oracle declined 1.6%.

DocuSign and Asana also struggled. Investors worried their core markets were becoming commoditized.

Salesforce and Visa combined to slice roughly 194 points off the Dow earlier in the session. The stock’s 7% drop carried weight in the price-weighted index.

The company trades 33% below its 52-week high of $359.95 from January 2025. Year-to-date, shares are down 4.9%.

Salesforce recently launched an updated Slackbot for Business+ and Enterprise+ users. CTO Parker Harris called it a “Porsche” and positioned it as an AI agent. The tool reflects the company’s push into AI agents that perform tasks instead of just answering questions.

Competition Intensifies

Competition in the AI space is growing. Anthropic introduced Cowork, a Claude Desktop feature that lets users direct Claude to folders for reading or editing files.

The broader market showed weakness Tuesday. U.S. stocks dipped after consumer price data matched expectations. Rate-cut bets remained largely unchanged.

In December, Salesforce raised its fiscal 2026 revenue forecast to $41.45 billion to $41.55 billion. The company also boosted adjusted earnings guidance, citing strong AI product demand.

But the bar stays high. Customers often test AI tools for months before committing to larger contracts. Scaling costs can surprise them, from compute expenses to support needs to slow enterprise rollouts.

Salesforce reports earnings on February 25 after the market closes. Investors will scrutinize demand signals and updated AI product guidance.

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